Chapter 8 – Business Organizations
Who Are these people and why are they important? Walt Disney Walt Disney Corporation Hugh Hefner Playboy Inc.
Who Are these people and why are they important? Ben Cohen and Jerry Greenfield Ben & Jerry's Homemade Holdings, Inc Oprah Winfrey
Who Are these people and why are they important? Bill Gates Microsoft Inc. Steve Jobs Apple Computers Inc.
Who Are these people and why are they important? Milton Hershey Chocolate Marshall Field Clothing
What is an Entrepreneur? A profit-seeker who develops a new product or process and assumes the risk of profit or loss
What is the purpose of Entrepreneurs? Introduce new products Improve Quality of Existing Products Howard Schultz (Starbucks 1985) Introduce new production methods Henry Ford (Assembly Line) Introduce new ways of doing business Dell computers sold initially over internet only Mary Kay sells directly to customers
Sole Proprietorship A Business Owned and Operated By One Person
Advantages Of Sole Proprietorships Easy Start-Up- Cost and Legal Considerations Are Small Full Control- One Person Is Responsible For The Business Exclusive Right To Profit- The Profits Go To The Business Owner.
Disadvantages Of Sole Proprietorship Unlimited Liability- Owner Is Financially and Legally Responsible For The Business. Limited Growth Potential- One Owner May Not Be Able To Raise Enough Money To Grow The Business Lack Of Longevity- Relying On One Person Limits The Ability Of A Business To Overcome Hardships.
Partnerships Partnerships- A Business That Includes More Than One Persons That Share Equal Decision Making Authority.
Three Type of Partnerships General Limited Limited Liability Partnership
General Partnership All partners share equally in both responsibility and liability.
Limited Partnership Only one partner is required to be a general partner
Limited Liability Partnership All partners are limited partners
Advantages Of Partnerships Ease Of Start-Up- Costs and Few Government Regulations Are Involved In Partnerships Specialization- Each Partner Will Bring His/Her Own Unique Talents Shared Business Losses- The Business Will Be Able To Face Adversity Better Than Sole A Proprietorship.
Disadvantages Of Partnerships Unlimited Liability- If One Partner Does Not Fill Responsibilities Then The Other Partners Will Have To Pick Up The Slack. Lack Of Longevity- If One Partner Drops Out Then The Other Partners Will Have To Struggle For Survival Potential for Conflict